On-trade

Irish pubs longest in lockdown in EU

The Drinks Industry Group of Ireland has joined vintners across the country in calling for a dedicated and immediate hospitality support package and a reduction in excise tax in Budget 2021.

 

Irish pubs and bars have endured the longest lockdown in the EU.

Irish pubs and bars have endured the longest lockdown in the EU.

The umbrella organisation for Ireland’s drinks and hospitality industry (including pubs, restaurants, hotels, off-licences, brewers and distillers) points to data showing that Irish pubs and bars have endured the longest lockdown in the EU.

Ireland’s wet pubs and bars have been closed since March.

While pubs that serve food were permitted to re-open at the end of June, these comprise just 40% of all pubs in the country, the rest having remained closed for over five months now.

Thirteen EU member states including Germany, Italy and Austria permitted their bars to re-open in May with Social Distancing restrictions in place. A further nine EU member states including France, Spain and the Netherlands permitted re-opening in June. Only Portugal re-opened its bars later, in August.

Sweden did not impose a lockdown at all while bars in Latvia have been allowed to stay open throughout the pandemic provided they can maintain two metres of distance between patrons. In the UK pubs were allowed to re-open on the 4th of July.

Only Romania among EU member states has kept its indoor bars shut though owners have been allowed to serve patrons outdoors since June provided they have an open-air terrace, DIGI points out, adding that if Ireland’s pubs and bars are permitted to re-open on the 13th of September, they will have been closed for six months.

However, there’s growing fear among publicans that their businesses will remain closed until 2021.

 

Cashflow problems

If publicans get to re-open their businesses in September they’ll still face immediate cashflow challenges including making back the money invested in Personal Protective Equipment and the overheads of maintaining the business with no income since March.

Almost half of publicans have taken on at least €16,000 in debt since the lockdown while one in five have taken on more than €30,000.

In the short to medium term ongoing Social Distancing restrictions, though a necessary precondition for re-opening, will impact revenue take due to reduced capacity. Events such as family celebrations and club meetings are currently not permitted.

Over the longer term these issues will be further compounded by a global downturn in the tourism sector.

Ireland’s 2020 tourism season has been non-existent and it’s likely to be significantly reduced in 2021 as recession hits earnings and virus fears persist, DIGI points out.

 

Support needed

Ireland’s drinks and hospitality industry has received no industry-specific Government support and there has been no concrete indication that any will be immediately forthcoming.

DIGI, which represents over 14,000 drinks and hospitality businesses, has therefore called for a dedicated and immediate support package for drinks and hospitality business owners and their staff and a 15% reduction in excise tax on alcohol in Budget 2021 – Ireland has the second-highest overall excise tax on alcohol in the EU.

Broken down by drinks category, Ireland has the highest excise tax on wine, the second highest on beer, and the third highest on spirits.

A reduction in excise tax, together with the package’s other measures, would allow drinks and hospitality businesses to recover from a six-month closure, recoup some money invested in PPE and cover the losses of operating at reduced capacity for the foreseeable future, believes DIGI.

An excise tax reduction would also help other drinks businesses, especially brewery and distillery start-ups, which have contributed to a boom in Irish manufacturing over the last decade.

 

Insight

Ninety per cent of pubs are located outside Dublin where they provide a place for their local communities to come together and socialise, said DIGI Chair and Director of Communications and Corporate Affairs at Irish Distillers Rosemary Garth, “They are key parts of our tourism product and our national culture.

“Irish pubs have endured the longest lockdown in the EU, losing half a year of business. The Government has so far failed to provide them with any kind of reassurance, certainty or long-term support.

“For many publicans the situation seems hopeless and it is little surprise that in a recent industry survey as many as 63% said they’d been under ‘extreme stress’. Many expect to be closed.

“Government support next year will be too late; the damage will have been done,” she continued, “The drinks and hospitality sector needs financial support now and in addition, this Budget should also provide an alcohol excise tax reduction.”

Without it, the industry risks permanently losing hundreds of businesses and thousands of jobs, she concluded.

 

 

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